Shell, Gazprom Set Asset Swap,
Giving Each Entry to New Sector

By

Geoffrey T. Smith in Moscow and

Bhushan Bahree in New York Staff Reporters of THE WALL STREET JOURNAL

Updated July 8, 2005 12:01 a.m. ET

Royal Dutch/Shell Group and Russian gas monopoly OAO Gazprom reached a deal to swap major natural-gas-producing assets in a sign of how Western energy companies can tap Russia's massive oil and gas reserves, even as the Kremlin has reasserted control over the sector.

Under the deal, government-controlled Gazprom will buy a stake of as much as 25% plus one share in the Sakhalin-2 natural-gas project off Russia's far-east coast. In return, it will cede to Shell a 50% interest in its massive Zapolyarnoye-Neocomian gas field...